THE BLOG

How The Guptas Successfully Annexed Eskom -- And The Curious Case Of The Trillian Millions

Why and how Eskom paid monies to Trillian is the R500 million question.

25/07/2017 03:59 SAST
Siphiwe Sibeko/ Reuters
An Eskom logo is seen at the entrance of their head offices in Sunninghill, Sandton, February 24, 2016.

The Guptas have ascended to a special place within South Africa's socio-politico-economic vocabulary. As one author puts it rather aptly, "the family name Gupta has become a shorthand for corruption in South Africa" and this is without prejudice I insist.

The Gupta Family's success story could have easily placed South Africa in a league where we can boast of "The South African Dream" just like the American Dream, but no! This story has become a tale of manipulation, corruption, and kleptocracy. The Guptas did not attain this feat on a silver platter but have worked deliberately hard for the past two decades to permeate the spheres of power and influence to a place where they are almost untouchable.

The Family name has emerged in almost all the major corruption scandals in the past few years especially during Zuma's administration. The most recent email leaks characterised the #GuptaLeaks has thrown daylight on many allegations and suspicions that the public has held about the family. What is most worrying is the degree of influence this family commands in a democratic state such as South Africa and over its largest and most crucial state-owned enterprise, Eskom.

The Guptas' Eskom - Powering Their World

In the face of all the revelations over the past couple of years, it would take a lethal combination of intellectual dishonesty and treachery for any South African to deny the glaring influence the Guptas wield over Eskom. But if anyone is still in doubts, here are a few pointers.

It is evident at least on the face of recent revelations in #GuptaLeaks that the Guptas have enjoyed very good and fruitful relationships with key officials and associates of Eskom. Leaked Gupta emails have revealed that, the family has played a role in Collin Matjila's appointment as the acting CEO of Eskom in 2014. Investigative journalists, amaBhungane, which has been at the vanguard of investigations into the Guptas have alleged that 'in his [Matjila] short tenure at Eskom, the Guptas have made massive gains.'

It has been alleged that soon after taking up the position, Matjila sidestepped internal legal advice and approved a ridiculous budget of R43 million sponsoring a business breakfast series being run by the Gupta-owned TNA media and further proposed contracts for the bulk purchase of TNA's publication The New Age; 4000 copies a day for 36 months at a cost of R12,288,000 for the period at no discount whatsoever. The leaks further pointed to large subscriptions of The New Age by the South African Airways.

The Guptas have demonstrated their influence or at least hinted at it through revelations by former finance minister, Mcebisi Jonas and MP Vytjie Mentor in the damming 355 page "State of Capture" report by Thuli Madonsela.

The Molefe-Singh-Gupta Coterie

Brian Molefe, the successor to Matjila vehemently denied associations with the Guptas despite evidence in the State Capture report and assertions by Ajay Guptas that Molefe was a "very good friend". His conduct at Transnet and subsequently Eskom also give him out. The buck stopped with Molefe at Transnet at the time Anoj Singh was ignoring internal technical counsel and awarding contracts to Regiments Capital. AmaBhugane reports instances where certain transactions which could have been handled internally by the company's treasury were unfathomably ceded to Regiments.

Molefe and Singh have been the most loyal and worthy Gupta-Agents given their history in various positions, first at Transnet and then at Eskom. Both men were at Transnet at the time of the dubious transaction involving Transnet and Regiments and Trillian Capital- controlled by Gupta lieutenant Salim Essa. Anoj Singh, the current Chief Finance Officer of Eskom, has always had a history with Eric Wood and Salim Essah both men run Trillian, which is at the centre of the R495 million payment controversy.

Eric Wood who has been described as "Rainmaker" for all Regiment-Transnet dealings moved to Trillian Capital where his family trust holds 25 percent shares while the majority shareholder Trillian Holdings holds 60 percent. Recall Trillian Holdings is under the sole directorship of Salim Essa- an associate of the Guptas. "Two sources, who know Essa well but asked not to be identified, allege that he acts as a proxy for the Guptas as well as in his own right."

Trillian Capital Partners have aggressively denied any links with the Guptas, however, reports indicate that Salim Essah's wife, Zeenat has a business relationship with the Guptas by holding a 5 percent share in a Gupta Family-controlled Shiva Uranium.

Essa's 100 percent-owned company, Elgasolve is known to have held 75 percent shares in VR Laser Services of which the Gupta Family investment vehicles hold 25 percent shares. Elgasolve also holds 22 percent shares in Tegeta Exploration and Resources, the company at the epicentre of the Guptas-Eskom coal deals. Another case in reference is the appointment of Mark Pamensky to the board of Eskom just three months after he joined the board of Gupta-owned Oakbay Resources and Energy.

The Big Why and How Could They?

Why and how Eskom paid monies to Trillian is the R500 million question even Johnny Dladla, current boss of Eskom is interested in unravelling.

According to amaBhungane 'an initial R10 million contract that was awarded to Regiments had been astronomically ballooned to millions of South Africans' tax payer monies'. Temporal analysis of Regiment's contractual relationship with Transnet reveals that over the period from 2012 to 2015 cost of services rendered had ballooned over R250 million, all carried out without clarity and without clear indications of due diligence. This was allegedly "driven by Singh and approved by Molefe."

Soon after Regiments, Trillian Capital took over the Eskom deal in what AmaBhuganedescribes as "kleptoparasitism" - that's when one predator steals another's prey". After several months of denying having a contract with Trillian, Eskom spokesperson Khulu Phasiwe finally admitted that "admitted Eskom had made payments".

amaBhugane.com

Critically appraising the matters arising, why has it taken so long for Eskom to admit making payments to Trillian? It is obvious that there are some forces within and without Eskom working relentlessly to cover up this story regardless of the prima facie evidence revealed in the advocate Budlenders report and other associated reports by AmaBhugane.

It was revealed that "when Budlender asked for copies of all the invoices Trillian had delivered to state-owned entities, Trillian handed over invoices addressed to Eskom and marked "paid" confirming that between April and August alone, Trillian received R266 million." Indeed, if Dladla is serious about knowing why and how payments were made to Trillian under the pretext of being a subcontractor to Mckinsey, he should ask his Chief Finance Officer- Anoj Singh.

Dark Days ahead for the state lighting company...

The days of load shedding may seem over, but not the leadership crisis at Eskom with the likes of Singh still at post. Media reports have indicated that Eskom is broke. According to DA MP Natasha Mazzone, 'Eskom has enough liquidity to cater only for the next three months and may not be able to pay its 49,000 employs in November.

However, in its queer wisdom, the company wants to pay bonuses to its executives including Molefe and I assume Singh too perhaps for the impressive work they have done in running Eskom since 2014 or so (and I am sure no matter how I say it, they will consider this a compliment). If South Africa's leadership can transplant characters such as Molefe and Singh from Transnet despite the rot to Eskom -- then perhaps what is run has deviated from democracy and must be called by its real name, an oligarch Kleptocracy.

In this whole story, Molefe and Singh will appear as the villains and should be treated as such.